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  • Leverages: Presented by Supriya Amin 40 Bhavik Doshi Anup Ratnapalki Swapnil Vaidya

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    Ramesh Bansude
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    The document discusses two types of leverage used by firms: operating leverage and financial leverage. Operating leverage refers to the use of fixed operating costs in a business that impact profits with changes in sales volume. Financial leverage occurs through the use of fixed financial costs, such as interest expenses, that also impact profits. The document will explain how to calculate operating and financial leverage, as well as their relationship and combined effect on a firm's profits and shareholder returns.

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    Leverages

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    The document discusses two types of leverage used by firms: operating leverage and financial leverage. Operating leverage refers to the use of fixed operating costs in a business that impact profits with changes in sales volume. Financial leverage occurs through the use of fixed financial costs, such as interest expenses, that also impact profits. The document will explain how to calculate operating and financial leverage, as well as their relationship and combined effect on a firm's profits and shareholder returns.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    4 views4 pages

    Leverages: Presented by Supriya Amin 40 Bhavik Doshi Anup Ratnapalki Swapnil Vaidya

    Uploaded by

    Ramesh Bansude
    The document discusses two types of leverage used by firms: operating leverage and financial leverage. Operating leverage refers to the use of fixed operating costs in a business that impact profits with changes in sales volume. Financial leverage occurs through the use of fixed financial costs, such as interest expenses, that also impact profits. The document will explain how to calculate operating and financial leverage, as well as their relationship and combined effect on a firm's profits and shareholder returns.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 4

    Leverages

    Presented By Supriya Amin 40 Bhavik Doshi Anup Ratnapalki Swapnil Vaidya

    Synopsis
    Introduction Types of leverages Operating Leverages * Calculation of Operating Leverages * Degree of Operating Leverages Financial Leverages * Effect Of Financial Leverages * Computation of Financial Leverages * Degree of Financial Leverages * Utility Of Financial Leverages Relationship between Operating and Financial Leverages Combined Leverage

    Leverages
    Introduction A firm can make use of different sources of financing Finance is raised for the of expansion Classified as those which carry fixed rate of return and those on which return vary Earnings available to shareholders are affected If earnings (EBIT) is less than variable cost exceed fixed cost Leverage implies the ability of a firm to use fixed cost asset or fund to magnify the return to its share sholder. Also defined as relative change in profit due to change in sales

    Types of Leverages
    Increase or Decrease in Profits occurs on account of fixed operating cost and fixed financial cost

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